Ian Woodward's Investing Blog

Last night the Futures were up strong, the Market opened up and then slid for another Bungee Jump.  We are only 30 S&P 500 points from the -8% line in the sand, then it’s left in the lap of the gods.  We need a $5 Trillion Coin to solve the problem:

As the caption says on the next chart: One more Day like these with a big sell off and we will be “Bungee Jumping” to Flash Crash levels:

We are currently sitting with 25% of the S&P 1500 stocks in Bucket <0 (Below the Lower Bollinger Band).  It won’t take much to drop this to Flash Crash levels of 62%, and then Heaven help us if we swoon to Black Swan Days of 75% should this all blow up in our face.  However, with the Market so oversold, we can expect a Bounce Play if this Debt Crisis is resolved by tomorrow, particularly since the Institutions have not opened the floodgates to the downside yet:

So far we have experienced the drip, drip process of a Market in Correction; the one-year trendline is now slightly broken to the downside, but with all the kerfuffle on the Debt Crisis the market is only about 6% down from its recent high.  Fortunately the Earnings Reports have been rather robust with over 72% beating Analyst Estimates.  This is particularly good when the likes of GOOG, IBM and AAPL all come in with strong reports:

The bottom line is that the Bears can turn on the floodgates spiggot if we drop another 30 points, while the Bulls have to wait for 72 points higher before it “Feels Good Man!”

Good Luck to us all…we need a bit of it these days.

Best Regards, Ian.

Although the deadline is August 2 for the Debt Ceiling resolution, I suggest the Market will be anticipating the outcome before then and probably by tomorrow.  I should remind you that a month ago the market was sitting on top of the world, and here we are a month later on the verge of a precipice.  The hour is late, and the House vote has not yet happened, so we are down to just one day:

I felt you would like to know what Euphoria and Precipice means in %B Terms so that you can judge where we sit:

I must remind you that the Market is currently in Correction as shown by the usual yardsticks we use for %B:

It’s finger biting time, and either you roll the dice and take a chance or you make up your mind to protect your portfolio.  Volatility as usual will be key to watch and as you can already see the VIX is pointing towards a new spike.  It’s Your Call.

Best Regards, Ian.

It’s time to laugh at this idiocy as the Nation’s blood boils.  401-K’s will soon become 401-Kegs at this rate.

I know the next slide has a lot to digest, but I wanted to get this whole mumbo jumbo down to one chart, as the market has of its own wish given us a Symmetrical Chart Pattern the likes of which I certainly haven’t seen before.  So staying with the “Send in the Clowns” Theme of my last couple of blogs, here is MY READING of what the MARKET is NOW telling us.  I have been wrong before and I will be wrong again, so enjoy it for what it is worth:

Best Regards…Oh, by the way, great to have Ron back safe and sound after a memorable vacation.

Ian.

The Stock Market has been very tolerant so far of all the Debt Ceiling debate, and although great Earnings Reports last week from the likes of GOOG, IBM and AAPL have helped to keep it pointed upwards, time is running out and we may be in for harder times to come.

The KISS Approach I have taught you with the Thin Blue Pencil Line confirms that we are still on the High Road Scenario:

Once more the VIX quietened down to a reasonably safe territory, having done a jittery dance to 21 the previous week:

…And the Chief Canary, AAPL, has been chirping its way to Hog Heaven and knocking on the door of breaking above 400:

…But, all bets are off for tomorrow as the Futures Market already seems to be signaling a rough ride.  We may end up with Perfect Symmetry:

Keep your Powder Dry and be ready to work in whatever direction the Market takes.  Let’s hope it doesn’t eventually end below 1250…-8%!

Best Regards, Ian.

Yesterday, I wound up my Blog Note by saying that given the major drop in the Market, it was most unlikely that the Nasdaq could gain 60 points to reverse the bad day and would you believe it, it happened!  Wonders Never Cease!

…And here are the reasons why with courtesy of, and compliments to, MarketWatch in their bulletins this morning:

Here is the updated Chart of the Nasdaq showing the 60 point rise:

With Earnings the hot subject right now, it seems the Canaries are all we have to watch…Now that’s Wishful Thinking:

For those who follow the AAPL Food Chain, here is the list as best as I can tell and their performance today:

Best Regards, Ian.